nonpublic information

Nonpublic information

Nonpublic Information

Major knowledge about a publicly-traded company that is not available to the public. Information may apply to its operations, such as its quarterly earnings, or to intangibles, such as an executive's imminent indictment. Nonpublic information almost always impacts a company's stockprice, either positively or negatively, when it is made public. Prior to 2001, the use of nonpublic information in investment decisions qualified as illegal insider trading. Since then, even the possession of relevant nonpublic information may cause one to run afoul of SEC rules, even if an investor would have made a particular trade anyway. See also: Rule 10b5-1.

nonpublic information

Information about a company that is unknown to the public. Insiders, including corporate officers and directors, are prohibited from buying or selling their firm's securities on the basis of nonpublic information.

In connection with the no-action letter, an assessment of a CRA's operational capability and ratings process is conducted that considers the following (related to the CRA); its organizational structure, financial resources; the size and quality of its staff, its independence from the companies it rates; its rating procedures; and, whether it has internal procedures to prevent the misuse of nonpublic information and whether those procedures are followed.

A person who provides personal, nonpublic information to obtain financial, investment or economic advisory services, regardless of whether there is a continuing customer relationship, is also entitled to notice prior to, and the ability to opt out of, any actual disclosure of such information to a non-affiliated third party.

For more than thirty years, supporters and critics of insider trading regulation have agreed on one thing--that insiders can beat the market simply by using nonpublic information to decide when not to trade.

As the top executive at Keefe, Bruyette & Woods, McDermott had access to confidential, nonpublic information about potential corporate mergers and acquisition transactions and provided Gannon with nonpublic information about at least six mergers, authorities said.

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